DAVID ROSENBERG: The Last Two Times Export Orders Collapsed Like This, We Were In A Recession

Exports appear to be collapsing around the world. Data out of Germany this morning showed exports falling 1.9 percent, and South Korea, the canary in the coal mine has seen exports crumble.

Now, Gluskin Sheff's David Rosenberg writes that soon we'll find "that the U.S. prints a negative-GDP reading on the back of a negative export shock that does not appear to be in any forecast".

He writes that 70 percent of real GDP growth since the "recovery" began three years ago has come from export volumes and inventory investment.

Then the declining pattern of ISM export orders - which declined from 59.0 in April, to 53.5 in May, 47.5 in June, and 46.5 in July - is naturally worrisome.

In fact, Rosenberg points out that there is an 81 percent correlation between annual growth in U.S. exports and ISM new orders, and that this level of new export orders coincided with the last two recessions as can be seen in the chart below:

Gluskin Sheff & Associates

Rosenberg writes that with exports declining, slowing spending by corporations, which should impact the housing recovery, and slowing consumer spending the U.S. could see zero percent growth as early as the fourth quarter.